Search by ticker code:
Generic filters

Marley Spoon (ASX:MMM) shares tank 30% on Q3 result

Shares in meal kit delivery company Marley Spoon AG (ASX: MMM) took a brutal 30% dive yesterday after the company released its third quarter results for FY21.

It’s been a wild ride for shareholders of Marley Spoon over the past year and a half. The company was a major Covid lockdown beneficiary causing sales to double between FY19 and FY20.

Since reaching over $3.50 per share last year, Marley Spoon’s market valuation has tumbled, with shares now changing hands for just over $1.

Source: Rask Media MMM 2-year share price chart

Q3 results

Overall, Marley Spoon brought in net revenue of €79.2 million. This was up 14% on the prior corresponding period (pcp), but slightly down from €80.6 million in Q2.

While the business continues to invest for growth, it reported an operating EBITDA loss of €13 million.

Management said that due to “volatile consumer behaviour”, revenue guidance was downgraded to between 26-28% (previous guidance was 30-35%).

The business finished the quarter with a cash balance of €33 million, up from 17€ on the pcp.

Subscriber numbers

Across the quarter, Marley Spoon recorded an increase in active subscribers across all its key markets when compared to this time last year.

However, when compared to Q2, these numbers have actually all gone backwards except for its Australian market. On the issue, management have noted that customers in the US and Europe have demonstrated “extensive post-lockdown vacationing”.

However, whether customers have been vacationing, or returning to supermarkets is the big question that is likely weighing on the share price.

Cash burn from operating activities was €7.7 million during the quarter. The business recently entered into another asset financing facility with National Australia Bank (ASX: NAB).

My take

If Marley Spoon was to achieve a midpoint of FY21 revenue guidance of 27%, that means it would need to make €85.3 million in Q4, which is more than all of the previous quarters this year.

While it’s true there’s a large addressable market that’s largely unpenetrated by meal kit services, I’m not entirely convinced that Covid has caused a permanent shift in consumer behaviour. I’ll be watching from the sidelines for this one.

If you’re looking for more ASX share ideas, here are two I’ve been looking at recently: 2 fast-growing ASX software shares for your watchlist.

If you're anything like me, you might be thinking now is a good time to have cash 'sitting on the sidelines'.

Whether you have $2,000 or $50,000, our new analyst report has 11 stock ideas could help transform your portfolio INSTANTLY. Right now, you can get the full analyst report emailed to you for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.